In today’s fast-paced real estate market, both agents and their clients are constantly seeking ways to maximize leverage to acquire investment properties. One innovative loan option that has emerged is the stated income loan with just a 10% down payment. This financing solution is proving to be a game changer for many investors looking to capitalize on property investments without the traditional hurdles that often accompany conventional loans.

Stated income loans are designed to simplify the borrowing process for individuals whose income may not be fully represented on paper. This includes self-employed individuals, freelancers, or anyone who has multiple streams of income. Unlike conventional loans that require extensive documentation, stated income loans allow borrowers to state their income without having to provide exhaustive proof, making it easier for them to qualify for loans and leverage their next investment acquisition.

The concept of a 10% down payment is particularly appealing. Traditionally, buyers are expected to put down 20% - 35% of the purchase price when securing a mortgage. However, with just 10% down, more investors can enter the market. This lower barrier to entry allows potential buyers to preserve their capital, enabling them to invest in additional properties or other investment opportunities.

The way the program works, 10% down payment means that 90% CLTV conforms to our underwriting guidelines.   That means we will make a 75% loan on residential, multi-family and mixed use properties.  On the commercial side we will go to 70% LTV on retail, office, warehouse, and light industrial including automotive. In either case, we are implying that a seller 2nd mortgage or a 2nd mortgage from another lender is acceptable. For example: We look at the 10% down payment plus a 15% seller 2nd loan the same as a 25% down payment, then we will fund a loan for 75% on a investment residential property.  Or on commercial properties, 10% + 20% seller 2nd mortgage is the same as 30% down and then we will fund a 70% LTV on a commercial property.

For real estate agents, understanding how stated income loans with a lower down payment work can be a powerful tool. It allows you to better assist your clients who may feel daunted by the prospect of large down payments or the invasive documentation processes typical of conventional loans. By educating your clients about this financing option, you can empower them to explore investment opportunities that they might otherwise overlook.

There are some nuances to consider when discussing stated income loans. First, it’s important to clarify that while these loans may be easier to obtain, they are not available to everyone. Lenders typically look for certain qualifications, such as a minimum credit score of 650 and experience operating rental properties. It’s crucial for your clients to understand that while the documentation process is streamlined, they still need to present a credible plan for their investment.  

It’s also essential to highlight that the terms of these loans can vary significantly. Not all lenders offer the same conditions, and the requirements may differ based on the properties involved. By partnering with Edward Schieber a mortgage loan officer, you can ensure your clients have access to the best options available. Establishing a relationship with a professional like him in this field can provide you with the insights needed to guide your clients through the process smoothly.

Another factor to consider is the type of properties that can be financed using stated income loans. While many investors may think of residential real estate, these loans can also be applied to multi-family units, mixed use  and commercial properties like retail, office and light industrial properties including automotive and warehouse types. Educating clients on the broad range of properties available for financing can help them expand their investment horizons.

One of the significant advantages of stated income loans is the speed at which they can be processed. Given the less rigorous documentation requirements, clients can often close on properties faster than they could with conventional loans. This can be particularly beneficial in a competitive market where timing is everything. By helping your clients understand these timelines and the benefits of quick financing, you can position yourself as their go-to resource for navigating the complexities of real estate investing.

For agents, it’s not just about understanding the product but also about effectively communicating its benefits to potential clients. You can leverage social media, community events, and open houses to share insights about stated income loans. Creating informative content that demystifies the process and highlights success stories of clients who have benefited from these loans can position you as a thought leader in your market.

Additionally, networking with other professionals — such as real estate attorneys and tax advisors — can provide a well-rounded perspective for your clients. When they see that you have a comprehensive understanding of the real estate landscape, they will be more likely to trust you with their business. Collaboration with other experts can also lead to referrals, further establishing your reputation in the community.

As you explore how to integrate stated income loans into your offerings, consider hosting seminars or workshops. Providing a platform for potential investors to learn about these loans can open the door for discussions and partnerships. Bringing in a mortgage professional to speak at these events can add value, giving participants a chance to ask questions and learn from an expert.

Moreover, emphasize the importance of a solid investment strategy. While stated income loans can provide access to funding, clients should have a clear plan on how they intend to utilize their investments. This can include researching properties, understanding market trends, and being aware of potential risks. Encouraging your clients to think critically about their investment approach will help them feel more confident and prepared.

It’s also worth noting that while stated income loans make it easier to qualify for financing, clients should still be mindful of their financial responsibilities. Discussing budgeting, property management, and long-term planning can ensure that they are not only able to acquire properties but also maintain them in the long term.

Stated income loans with just 10% down are revolutionizing the way investors approach real estate. By understanding this financing option, you can better serve your clients and help them achieve their investment goals. Your expertise as a real estate agent, combined with the right mortgage professional by your side, can create a powerful partnership that benefits everyone involved.

If you’re interested in learning more about how stated income loans can work for your clients, or if you have specific cases you’d like to discuss, please call Edward Schieber at  800 663 1382 . Let’s connect and explore the possibilities together!